Essays on Human Capital and Executive Compensation

Abstract

The contemporary executive career looks different from the “company man” era of post World War II. At that time, executives rose almost exclusively within a single firm, learning the business over many loyal years of service. Since the 1970s, firms have progressively relied more on external markets for filling its leadership ranks. As a result, the value of executives has become increasingly defined by capabilities portable across organizational settings. External markets have less information about executive abilities compared to incumbent employers, which strengthens the influence of externally observable signals of quality on executive career opportunities and compensation. Across three studies, this dissertation empirically explores how external markets value executive human capital attributes. In particular, this work focuses on how external markets differ from incumbent employers and explores implications for executives building their careers across multiple organizations.